Health care costs can be controlled

Health economist and Professor Gerald Friedman, University of Massachusetts, celebrated Medicare’s 48th birthday by releasing a new study on health care. Analysis shows that a non-profit single-payer system based on an Expanded and Improved Medicare for All Act, H.R. 676, introduced by Rep. Conyers, D-Mich, and co-sponsored by 45 other lawmakers, would “save an estimated $592 billion in 2014, which would be more than enough to cover all 44 million people left uninsured by the ACA (Obamacare), and upgrade benefits for everyone else.” Friedman says the savings would come from slashing the administrative waste associated with today’s private health insurance industry ($476 billion), and using government bargaining muscle to negotiate pharmaceutical drug prices down to European levels ($116 billion).

“These savings would be more than enough to fund $343 billion in improvements to our health system, achieving truly universal coverage, improved benefits, and the elimination of premiums, co-payments and deductibles, which are major barriers to people seeking care.”

Friedman says the savings would also fund $51 billion in transition costs while retraining displaced workers from the insurance industry and phasing out investor-owned, for-profit delivery systems.

Over 10 years, the savings from reduced health inflation from cost-control methods such as negotiated fees, hospital global budgeting, and capital planning, would amount to $1.8 trillion. By expanding Medicare to everyone, we’d save billions of dollars annually. Friedman said the plan would be funded by current federal revenues for health care, a small increase in payroll taxes instead of insurance premiums, and new modest tax increases on high income earners and a small tax on stock and bond transactions. 95 percent of households would save money.

These findings are consistent with other economists, the CBO, and the General Accountability Office.